Pay Attention to What's Behind the Curtain1 Aug, 2009 By: Jacqueline Renfrow Response
A lot of attention is given to the production and media buying and planning for a direct response campaign. And while creative and media are obviously integral, support services — the packaging, fulfillment, payment processing and customer service — are often overlooked, despite their vital roles in the success of product sales and revenue. These back-end vendors should be much more than an afterthought in a direct response campaign. They can have an important impact on customer acquisition and retention and should stand at the forefront of any media plan.
If the state of the support services industry could be summed up in one word, it would be technology. It seems every vendor in the direct response industry shares the common thread of having to adapt business for technological changes. With today's advances, marketers have a great opportunity to work with back-end companies to produce tailored media campaigns that are forward thinking yet protective of consumers' rights.
This year's support services guide demonstrates how important back-end agencies are to a campaign's success.
Technology has given marketers greater choices, such as picking between a live staff versus computer staff in a call center; answering customer service questions through live operators on the phone or online; developing a process to secure fraud prevention and tailoring data analytics from fulfillment companies based on client needs. Support agencies that remain successful, even in these tough economic times, are those that find balance: like a tight-rope walker, balancing technology and fraud prevention on one end and the product knowledge and customer service on the other.
Choosing a Processor
Processing payments for a product sold in the direct response industry requires a unique skill set. The needs of a merchant processing in a card-not-present environment are different than the needs in a typical brick-and-mortar store. Knowing the business is integral when picking a payment processor for a DR campaign.
Card-not-present payment processing has become even more extensive with the expansion of DR Internet sales.
"First and foremost, get a processor that understands how direct response merchants do business," says Jason Pavona, executive vice president, sales and marketing, of Lowell, Mass.-based Litle & Co. "Processors should have experience with media buyers, know how fulfillment is done and how to deal with recurrence."
Pavona also talks about the importance of a processor that reports back strong data and analytics, a key ingredient in growing revenue and operational efficiency. The data needs to be "actionable," says Pavona, so the company can use it to make adjustments to the campaign.
Moreover, a payment processor has to be familiar with the specifics of your business and your vertical if they're going to be a part of your DR campaign. "It's not a one-size-fits-all model," says Pavona. "And any processor that believes that's the case hasn't spent enough time understanding direct response."
Call center training often focuses on such metrics as call conversions, average order value and media efficiency ratio.
Continuity products play an important role in the payment processing of many DR marketing programs, especially those in the health or beauty categories. "You need to work with a processor that understands the goal of a DR program is all about recurring orders, by definition, you need to increase the lifetime value of the consumer that bought the product," says Pavona. "If they don't know lifetime value is key to success — and that you have to capture that value — you're not thinking about it the right way."
One recent measure of concern for payment processors is the industry's regulatory changes. Some processors are having to adjust platforms for increased regulations. Brian McGarry, national sales manager of Hauppage, N.Y.-based TransFirst ePayment Services, says there have been several security mandates in the payment processing industry during the past five years by the Visa and MasterCard associations related to PCI compliance and data security standards.
Fulfillment houses have grown from the shipping arm of a DR campaign into a more complex customer service hub.
"As more and more sales are generated via the Internet, back-end support to help prevent fraud is also key," says McGarry. "The security standards are a morphing entity and the future will certainly see some changes in that regard. And as new payment types and channels evolve, the successful processors will also need to be able to provide these options to their merchants."
Beyond complying with regulations, McGarry says that when choosing a payment processor, it's important to look for a competent underwriting department. "This will allow successful and emerging merchants to pursue their marketing efforts knowing that their processor has evaluated their campaign to ensure success," he adds. "There also needs to be an operations process to help clients understand a number of issues that include fee management, fraud mitigation, cardholder security and a number of other topics mandated by the card associations."